Correlation Between Aristotle Funds and Western Asset
Can any of the company-specific risk be diversified away by investing in both Aristotle Funds and Western Asset at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aristotle Funds and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristotle Funds Series and Western Asset Municipal, you can compare the effects of market volatilities on Aristotle Funds and Western Asset and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aristotle Funds with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Funds and Western Asset.
Diversification Opportunities for Aristotle Funds and Western Asset
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aristotle and Western is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Funds Series and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Aristotle Funds is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aristotle Funds Series are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Municipal has no effect on the direction of Aristotle Funds i.e., Aristotle Funds and Western Asset go up and down completely randomly.
Pair Corralation between Aristotle Funds and Western Asset
Assuming the 90 days horizon Aristotle Funds Series is expected to generate 3.25 times more return on investment than Western Asset. However, Aristotle Funds is 3.25 times more volatile than Western Asset Municipal. It trades about 0.17 of its potential returns per unit of risk. Western Asset Municipal is currently generating about 0.01 per unit of risk. If you would invest 976.00 in Aristotle Funds Series on September 1, 2024 and sell it today you would earn a total of 479.00 from holding Aristotle Funds Series or generate 49.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 56.16% |
| Values | Daily Returns |
Aristotle Funds Series vs. Western Asset Municipal
Performance |
| Timeline |
| Aristotle Funds Series |
| Western Asset Municipal |
Aristotle Funds and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristotle Funds and Western Asset
The main advantage of trading using opposite Aristotle Funds and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Funds position performs unexpectedly, Western Asset can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Western Asset will offset losses from the drop in Western Asset's long position.| Aristotle Funds vs. Western Asset Municipal | Aristotle Funds vs. Volumetric Fund Volumetric | Aristotle Funds vs. Qs Large Cap | Aristotle Funds vs. Bbh Partner Fund |
| Western Asset vs. Lord Abbett Diversified | Western Asset vs. Blackrock Conservative Prprdptfinstttnl | Western Asset vs. Pioneer Diversified High | Western Asset vs. Aqr Diversified Arbitrage |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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